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May 05, 2013 at 10:06am IST

After Saradha scandal, Mamata govt cracks down on MPS group

Kolkata: The West Bengal government has sealed the offices of MPS group, a business house that has an estimated liability of Rs 17,000 crore and is under the scanner of the Securities and Exchange Board of India (SEBI). The crackdown comes after the collapse of Saradha group's chit fund business in April, which affected thousands of depositors.

Panicking depositors and agents protested outside the MPS group's office at Lake Town in northern Kolkata after the state government restrained its management from accessing the company's main corporate office. The move could potentially force MPS to stop running businesses with depositors' money and give Chief Minister Mamata Banerjee a weapon to take on the Left Front, under whose erstwhile rule the company is alleged to have flourished.

MPS has investments in social farming and tourism. It is alleged that it was able to expand its businesses only because of clearances from the state's previous Left Front government. Former ministers Abdur Rezzak Mollah and Anisur Rahaman allegedly allowed MPS to acquire land - even from tribals - for its projects. The two CPM leaders have refused to comment on their role.

Not far from Jhargram, where he has invested in a resort and social farming projects, MPS chairman Pramatha Nath Manna used to collect deposits from rural households through another firm, Satadal Savings and Investment Private Ltd. After operating for 15 years, Satadal Savings shut down in 1997. Depositors had alleged at that time that Manna and other directors of the company cheated them of at least Rs 50 crore.

"It will come out slowly that the CPI(M) is responsible for the miseries of people in our state," said Trinamool Congress leader Partha Chatterjee. Ever since the Saradha group floundered, leaving depositors in the lurch, Mamata Banerjee has been struggling to deflect criticism for administrative inaction against companies that took public deposits. The MPS group's case appears to have given her the ammunition to take on the CPM.